Glencore CEO Ivan Glasenberg
Photo by: Bloomberg
JOHANNESBURG (miningweekly.com) – Diversified mining and marketing company Glencore has bought the remaining 31% stake in Mutanda Mining for $922-million and a further 10.25% stake in Katanga Mining for $38-million from Dan Gertler’s Fleurette Group, the company’s joint venture partner.
The all-cash transaction will result in Glencore paying Fleurette a total of $534-million in cash, after taking into account the settlement of outstanding loans payable by Fleurette to Glencore and shareholder loans owed to Fleurette by Mutanda.
“This is an attractive purchase price,” Jefferies analysts said.
“It’s a sensible deal at a reasonable price and should be earnings accretive under most copper price scenarios,” Credit Suisse analysts commented.
This is Glencore’s second acquisition in virtually as many months following its oil deal with Russia’s Rosneft.
Fleurette said in a media release that it had invested more than $500-million in the acquisition and development of Mutanda, resulting in a significant boost to production, and, in turn, significant revenues to the Democratic Republic of Congo (DRC) State in the form of taxes and royalties.
Mutanda, now operating at full capacity, is producing at a rate of more than 200 000 t of copper a year.
London-, Hong Kong- and Johannesburg-listed Glencore, headed by CEO Ivan Glasenberg, first invested in the DRC in 2008.
Its latest DRC deal comes at a time of active involvement by the Carter Center and its Congolese civil society partners on presenting key findings from fiscal analyses of five major mining projects in DRC, including Glencore’s Mutanda and Kamoto Copper Company, Katanga’s DRC subsidiary.
On its website, Glencore expresses commitment to helping the DRC regain economic stability and achieving lasting economic growth.
During Fleurette’s involvement, employment of local Congolese tripled. Mutanda has also made extensive investments into the surrounding local community, as well as creating a micro economy around the mine site.
Mutanda and Kamoto are said to have generated $3-billion in tax revenues since Fleurette’s initial investment.
“Fleurette has helped build a true DRC mining champion in Mutanda and shown how long-term commitment and huge investment can create significant value for the DRC people and all stakeholders,” the company said in its release to Creamer Media’s Mining Weekly Online.
“It has become one of the largest taxpayers in the DRC. We’ve shown we can make massive investment decisions in challenging, complex operating environments, and expand great assets which, in turn, provide huge benefits to the people of the DRC,” Gertler commented.